In a response to yesterday's blog, Erickson wrote:
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"My guess is that there are very few good true odds for any of the World Cup teams - there's a lot of built-in profits in setting up the lines to begin with. Maybe not to the extent of horse racing, for instance, but for a big event like this, I have to imagine it's pretty difficult to find a good price for any team to win it all beforehand. In fact, I'd argue it's even harder to find true odds for the underdog nations."
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His comments are well-reasoned, and deserve a closer look.
In general, yes, most betting shops build a lot of juice into these markets. An exception is Betfair, where the current market as I post this is 101.8|PERCENT| (winning bets pay some measure of commission on top, depending on how much volume a customer pumps through the system). Given that I think the Spain price is short and I think the England price is short, I actually think there's value in some of the other teams. Specifically, I like Argentina (+720), Holland (+1050), Germany (+1450), Italy (+1650), and Portugal (+2900) as "advantage" bets at those prices.
More interesting from a broader point of view is his comment about it being harder to find true value on underdog nations.
First, while the Betfair prices are pretty good, Betfair is an exchange that assumes no risk itself. Betfair merely matches people willing to bet, and holds the money. Regular bookies are "on the hook" for winning bets. Most internet software is set up to limit a customer's maximum stake, not his maximum win. This usually necessitates "rip-off" prices on the longshots.
Some years ago when I was working in the Caribbean for a medium-sized outfit, I was woken from sleep by an irate owner of the company. I had put up a prop on which teams would be relegated from the English Premier League, $500 limit stake. I was careful to state "Sporting Reasons Only" and to make clear that any team which suffered multiple player fatalities (such as in a plain crash) would get a refund, relegated or not. This let me post Manchester United, the league's best team, at a roughly fair price of 10,000-to-1.
As I was saying, Big Boss woke me up: somebody had scattered the board with bets (that's good), including $200 on Manchester United to win $2 million (I was told that's bad).
Manchester United won the League that year, basically wire to wire, and never looked like getting relegated. I was nevertheless discouraged from posting such odds in future. For some weeks I wore the nickname of "the $2 million man". I talked to the guy who placed the bet years later. He had meant to bet $2, not $200, but let it ride figuring it was "destiny".
So we looked at the software, and called the developer. Could we put props up with "maximum win"? (Looking at our 2010 World Cup example, we might be willing to take $50K on Spain at 4/1, for exposure of $200K, but only $20 on North Korea at 10,000-to-1 for the same exposure before chopping the price. It would be a cute gimmick, however, to be biggest price on the longshots by a country mile—that stuff gets you in the papers.) Turns out that no, we couldn't do that, and no one had ever asked the developer for such a feature.
(If any developers are reading this, it would be worthwhile putting in, and not just for fluffy futures bets: an 11-point NFL moneyline looks something like -500/+425. Lots of books would love to let a customer put $100K on the favorite to win $20K, but few would be interested in taking $20K on the dog to win $85K in one chunk.)
A second point worth making: with longshots clustered between 100/1 and 1000/1, the key is always trying to figure out who has a slim chance and who has zero chance. Here's my best guess for the World Cup:
No European team should be higher than 100/1, no matter who it is. Just to get here, these teams had to beat somebody half-decent. Europe has 13 teams in this dance, and the 30th best team in Europe is probably still the 40th best team in the world.
No South American team should be higher than 100/1 either. Brazil and Argentina are obviously favourites, but in the qualification process Bolivia beat both those teams—and Bolivia didn't qualify. As to the other three qualifiers, Chile and Paraguay both won home games against Argentina. Uruguay has a win over Paraguay, two draws with Chile, bounced Costa Rica in a playdown, and recent friendly wins away to Switzerland and home to Israel.
New Zealand, North Korea, and Honduras have zero shot.
As to the rest, your guess ("slim" or "none") is as good as mine.